Pentagon, Lockheed agree 850 F-35 jet plan

The Pentagon and Lockheed Martin announced a 10-year framework agreement Thursday to produce 850 F-35 fighter jets, but the plan still needs congressional approval and funding.

Neither side gave a value for the agreement. The Pentagon said it would “modernize and expand” the F-35 program, while Lockheed said it would cover initial spares, 10 years of modification kits and sustainment, and international customer orders.

Lockheed said it would fund $7 billion in projects supporting the aircraft in exchange for the US government’s 10-year commitment. The company said long-term pricing and volume discounts were expected to save billions of dollars.

F-35 jets come in three versions that can cost more than $100 million each. Lockheed said more than 1,375 F-35s are based around the world and that the program will support more than 315,000 jobs and nearly $80 billion in economic activity over the next 10 years.

Lockheed shares were up more than 6% after the announcement. The company also reported third-quarter earnings that it said benefited from higher activity across all its segments.